Market failure implies that
a. in the real word, the market fails to achieve equilibrium
b. with an unequal distribution of income, the market will fail to provide sufficient goods to the poor
c. when externalities are present, the market will fail to provide the socially optimal price and output
d. negative externalities are greater than positive externalities so that the market fails to create an efficient outcome
e. the inability of the market to solve the problem of unnecessary demand is caused by persuasive advertising
C
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Fixed costs and overhead are identical
Indicate whether the statement is true or false
When the government bans a good:
A. the cost of breaking the ban needs to be sufficiently low in order to be effective. B. it doesn’t need to change the trade-offs consumers face. C. it will only be effective if it can be easily enforced. D. it should get approval from the community before exacting the ban to be more effective.